Posted by: The moderator | June 25, 2010

Financial overhaul, but with reservations

It looks like the Dodd-Frank Bill has been born. Banks will be barred from placing too much of their money into risky ventures and new oversight agencies under the authority of the Federal Reserve and the Treasury Department will be created. Best of all, banks will no longer be able to bet against their own securities that they sell to clients.

However, financial reform will not play a role in the auto industry, thanks to Detroit’s powerful auto lobbyists and their stranglehold on midwestern Democrats. There will also be some exemptions for banks to do limited investing in hedge funds, all so Republican Scott Brown doesn’t get hammered by his wealthy constituents in Massachusetts. The bill also gives shareholders more say in corporate governance, but what good will that do when most shareholders don’t understand what’s going on or don’t care enough to even vote for board members?

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